1. Financing Energy Projects in CEE
Gábor Kiss, EBRD
Security of Energy Supply Conference – Pécs, Hungary
29 April 2011
March 2011
© European Bank for Reconstruction and Development 2010 |

2. AGENDA
Overview of EBRD: Mission and Guiding Principles
EBRD Financing Capabilities and Requirements
Power & Energy Utilities: Focus and Experience
Renewable Energy Case Studies

3. Overview of EBRD: Mission and Guiding Principles
EBRD Financing Capabilities and Requirements
Power & Energy Utilities: Focus and Experience
Renewable Energy Case Studies

4. EBRD: Foundations of operations
Apply sound banking principles to all projects
We do not subsidise
Advance the transition to a full market economy
Priority to promote private sector involvement and market expansion
Support, but not replace, private investment: additionality
Act as a catalyst for higher and riskier involvement of financiers
Achieve environmentally sound and sustainable development

5. Network of 36 offices in 30 countries

6. EBRD invests in times of crisis
Invested over €62.0bn in more than 3,119 projects since 1991*
Private sector > 79% of portfolio
Portfolio is 83% Debt, 17% Equity
AAA rating, €23bn base capital
€9bn invested in 2010, a 77% increase since 2008
* through 31 December, 2010
€ billion
Annual business volume (ABV)
Net cumulative business volume

7. Overview of EBRD: Mission and Guiding Principles
EBRD Financing Capabilities and Requirements
Power & Energy Utilities: Focus and Experience
Renewable Energy Case Studies

8. Benefits of working with the EBRD
Strong, internationally recognized partner with long term perspective
Mitigation of political and regulatory risks
Policy dialogue with government and regulators
Grant-funded technical assistance
Finance and operations monitoring
Shareholder ’ s
Value
EBRD value -
added
Equity
Financing
LT Debt
EBRD
Value-added
Debt
Flexible deal structure
Debt finance to both public and private sector
Syndication under preferred creditor status
Catalyst to access additional debt
Support of strategic investors
Perception of quality investment
Sector expertise through Board of Directors
Good corporate governance
Catalyst to access additional equity
Positioning as neutral party

9. EBRD Facilities LOANS EQUITY Project finance loans
Corporate loans with specified use of proceeds
Tenor of years
Margin benchmarked to market
Fixed rate and/or local currency possible
EBRD can directly finance up to 35% of an enterprise's long term capital (or project costs for greenfield projects); additional funds mobilised through syndication
EBRD equity stake typically below 20-25% (meaningful, but minority)
Investment through capital increase
Invest in Funds to address smaller projects or larger stakes
Exit through IPO, trade sale or put/call agreement
Political and regulatory risk mitigation

10. Leveraging commercial finance
Catalyst for commercial investment: Every €1 invested or lent by the EBRD mobilises €3.1 from other sources
Equity: by investing as a minority shareholder we reduce the equity burden and add value through partnership
Debt syndication: The EBRD can syndicate all or part of the senior debt under A/B structures
Debt co-financing: The EBRD will work with or alongside other commercial banks to provide the appropriate debt package

11. Overview of EBRD: Mission and Guiding Principles
EBRD Financing Capabilities and Requirements
Power & Energy Utilities: Focus and Experience
Renewable Energy Case Studies

12. Primary objectives
Support sector reforms that enable energy sectors to function according to market principles (e.g. increased competition, market liberalization and private ownership)
Strengthen frameworks for regionalisation (trans-border transmission lines, energy trading)
Prioritise environmental, energy efficiency and renewable energy investments

13. Financings by sector
Cumulative EBRD financing to power & energy projects since 1991 is €5.8 bn across 125 projects with €21.8 bn total value
In 2010 invested over €1.2 bn in 21 projects with a total value of €8.9 bn,
In the last five years, number of projects per year has doubled and annual business volume has tripled
Renewables represent c. 20% of total financing today, comprised primarily of wind and hydro but also including biomass
Financing by Sector (2010)
Unaudited as at 31 December 2010
Note: Renewable power does not include large hydro.
Source: EBRD data

14. Renewables financing by
Focus on renewables
Renewables financing by
Region ( )
In 2010 the EBRD signed €220 mln of financing for six renewables deals with a total gross project value of €820 mln
The EBRD has been most active in financing renewables projects in Poland, Hungary, Bulgaria and Turkey
Award winning transactions include St Nikola (Bulgaria), Rotor (Turkey) and Margonin (Poland)
Technologies financed to date include wind and hydro (together c. 90%) and biomass
About half of the wind farms financed to date were equity investments, including 3 transactions with Iberdrola and 2 investments in equity funds
Unaudited as at 31 December 2010
Note: Renewable power does not include large hydro.
Source: EBRD data

15. Overview of EBRD: Mission and Guiding Principles
EBRD Financing Capabilities and Requirements
Power & Energy Utilities: Focus and Experience
Renewable Energy Case Studies

16. EBRD: Wind farms financed
Project
Sponsor
EBRD Investment
Debt
Equity
Bulgaria
St. Nikola 156 MW
Suvorovo 60 MW
AES
Grupo Enhol
EUR 70 mln
EUR 60 mln
Estonia
Raisner OU 130 MW
Iberdrola Renovables
EUR 0.9 mln
Hungary
Wind farm portfolio
Iberdrola Renovables
EUR 50 mln
Poland
Tychowo 50 MW
Wind farm portfolio
- Margonin 120 MW
Global RPI
Iberdrola Renovables
EDP Renovaveis
EUR 30 mln (in PLN)
EUR 75 mln (in PLN)
EUR 45 mln (in PLN)
Turkey
Rotor 135 MW
Zorlu Enerji
EUR 45 mln
Mongolia
Salkhit 50 MW
Newcom
EUR 0.4 mln
Regional
Enercap RE Fund
FreEnergy
Various
Nelja Energia
EUR 25 mln
EUR 19 mln

17. EBRD: Hydropower plants financed
Project
Sponsor
EBRD Investment
Debt
Equity
Bulgaria
Vez Svoghe 26 MW
Petrovilla
EUR 47 mln
Russia
Hydro OGK 10,000 MW
RusHydro Bond Issue
RusHydro
EUR 53 mln
EUR 110 mln
Albania
Power Sector Reconstruction 800 MW
KESH
EUR 30 mln
Georgia
Okami and Lopota HPPs 3.5 MW
Enguri HPP Rehab
Various
Govt of Georgia
EUR 0.2 mln
EUR 56 mln
Armenia
20 Various HPPs 56 MW
Various
EUR 5 mln
FYR Macedonia
Mali Hidro Elektrani 6 MW
Feroinvest Veles & AD GRANIT Skopje
EUR 6 mln

18. Thank you for your kind attention!
Gábor Kiss
Principal Banker
+36 (1)